ESMA launches Call for Evidence on developments in Virtual Currency Investment

ESMA launches Call for Evidence on developments in Virtual Currency Investment

On the 22nd April 2015, the European Securities and Markets Authority (ESMA) launched a call for evidence on investments using virtual currency or distributed ledger technology.

The call for evidence seeks the views of market participants with a view to gathering information that may help ESMA better understand how different virtual currencies and the associated blockchain, or distributed ledger, can be used in investments. It is understood that ESMA’s request follows the availability of facilities to use the blockchain infrastructure as a means of issuing, transacting in and transferring ownership of securities in a way that bypasses the traditional infrastructure for public offer and issuance of securities, trading venues like exchanges and central securities depositaries or other typical means of recording ownership.

Accordingly, ESMA is seeking input from stakeholders, including existing financial institutions, new start-ups or their technological advisers, and issuers and investors, on:

  • Virtual currency investment products, i.e. collective investment schemes or derivatives such as options and CFDs that have virtual currencies (VCs) as an underlying or invest in VC related businesses and infrastructure;
  • Virtual currency based assets/securities and asset transfers, i.e. financial assets such as shares, funds, etc. that are exclusively traded using virtual currency distributed ledgers (also known as block chains); and
  • The application of the distributed ledger technology to securities/investments, whether inside or outside a virtual currency environment.

The consultation will run until the 21st July 2015.

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